Even after Tesla announced disappointing earnings in January, its stock still managed to rise , buoyed by CEO Elon Musk 's talk of robotaxis and humanoid robots.
But the EV maker's valuation dropped below $1 trillion for the first time since November on Tuesday after the stock fell 8%, following figures showing Tesla sales in Europe were down by 45% last month, compared with January 2024.
The fall came as Tesla faces growing competition — and Musk's politics have one prominent analyst concerned about his focus.
Tesla stock is down by a fifth this year, paring back the epic rally that followed Donald Trump's election victory in November.
That decline has shaved close to $130 billion off Musk's net worth since mid-December, according to the Bloomberg Billionaire Index.
He's still the world's richest person at $358 billion — well over $100 billion ahead of Jeff Bezos, though the gap has narrowed considerably in just a few weeks. Much of Musk's wealth stems from his stake in Tesla.
Tesla's annual sales declined for the first time last year amid growing competition from Chinese EV makers.
Shares fell 6% earlier this month after Tesla's Chinese competitor BYD announced it would install advanced self-driving tech on all its vehicles for free. In response, Tesla is now rolling out its own driving assistance features on cars sold in China .
'Downside impact'
Dan Ives, the Wedbush analyst who has previously been bullish on Tesla, wrote in a Monday note that Musk's role in the DOGE department in President Donald Trump's administration had had a "visible perceived downside impact" on Tesla stock.
"The worry of the Street is that Musk dedicating so much time (even more than we expected) to DOGE takes away from his time at Tesla in such a crucial moment and year for the company," he wrote. Ives said he still expected the company to reap the benefits of Musk's White House influence in the long run, however.
As well as DOGE, Musk has been intervening in European politics, vocally supporting Germany's far-right AfD party in that country's election on Sunday. His growing presence in politics has triggered protests and isolated acts of vandalism.
Protesters gathered outside Tesla showrooms in several US cities last week. The company said on X it would press charges against anyone found vandalizing its charging units after a supercharger was defaced with swastika graffiti in Salt Lake City over the weekend.
Political visibility
The tech analyst Gene Munster of Deepwater Asset Management wrote on X on Tuesday that Tesla's share price decline was largely because of investors recalibrating their expectations for how many cars the company was likely to sell this year. "The catalyst to the adjusted expectations has been Musk's increased political visibility, alienating buyers," he said.
He added that this dynamic was already beginning to show up in Tesla's tumbling sales numbers in Europe.
Munster said Wall Street had been expecting 2 million deliveries from Tesla this year, but the figure could be closer to 1.7 million. That would mean a year-on-year decline of 4% — a "dramatic reversal" from expectations of a 12% increase.
"The stock is likely not going to bottom until the in-print numbers get closer to the whisper numbers," he wrote. "I continue to believe this sets the table for an even stronger 2026, given we should start to see contribution from the lower-cost model early next year."
Ross Gerber, an early Tesla investor who still holds a stake, is also gloomy on the outlook for Tesla stock, warning it could fall as much as 50% . Last week he told Business Insider about his concerns over Tesla's Full Self-Driving technology, Musk's distractions, slowing sales — and the premium attached to the stock.
Polestar offer
Figures from Deutsche Bank show Tesla sold 113,499 cars last month in 15 markets that account for about 90% of global EV and hybrid sales, including China, the USA, Japan, Germany, and the UK. That represented a 12.1% decline from January 2024 and a 37.5% slide compared with December.
One of Tesla's EV rivals is already trying to take advantage. Polestar has started offering Tesla owners a $20,000 discount on the Polestar 3 EV for a limited period. CEO Michael Lohscheller told Bloomberg that Elon Musk's politics were a sales opportunity for the Volvo sub-brand, both of which are controlled by China's Geely.
Tesla didn't immediately respond to a request for comment.
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